New economic report shows increasing racial disparities in Connecticut

As Connecticut slowly continues its economic recovery from the Great Recession, racial disparities have increased on several measures of employment and wages, according to a new economic report from Connecticut Voices for Children.

The education nonprofit released State of Working Connecticut, which has been coming out annually since 2000, on Monday.

"I think the largest big takeaway is the growing disparities in Connecticut over the past year, especially among people of color," said Ray Noonan, associate policy fellow at Connecticut Voices for Children and author of the report.

It compares data from 2015 to 2016 on some measures, and from 2011 to 2016 on others. The organization's rationale for the report is that "children do well when families do well, and families do well in part when the economy provides jobs with fair wages and good benefits."

The data comes from analyses of the U.S. Census Bureau's Current Population Survey by Connecticut Voices for Children and by the Economic Policy Institute.

State of Working Connecticut examined racial inequities among three wage groups, defining low-wage as occupations with a median of $15 or less, mid-wage as $15.01-33.95 and high-wage as more than $33.95.

While people of color constituted 24.1 percent of the state's workforce in 2011 and 29.8 percent in 2016, their representation as low-wage workers grew from 36.8 percent to 50.9 percent.

And while their share of the general population increased, they fell from making up 21.5 percent of high-wage workers in 2011 to 19.4 percent in 2016.

From 2015 to 2016, the median hourly wage rose by 4.9 and 2.7 percent for white and Latino workers, respectively, but fell by 3.1 percent for black workers, the report found. The median white worker makes $10.08 more per hour than the median black worker.

Unemployment for black people in 2016 remained nearly triple the rate for white people, 11.5 percent compared to 4.1 percent, and there have not been statistically significant gains in the past year for black people across four labor force categories. Those indicators are unemployment rate, labor force participation rate, employment to population ratio and underemployment.

In 2016, Latinos became the group with the highest percentage of working-age adults who are employed, after coming in behind white and Asian/Pacific islander adults last year.

The number of employed Latinos in Connecticut's labor forced increased by 68,000, or 34.6 percent, the report stated. But Latinos also saw a 5.9 percent increase in underemployment, and unemployment rose among Latinos with some college education.

Noonan attributed increased wage inequality between people of color and white people in part to the austerity budgeting of the past few years.

"When you start pulling back services for children and families ... that ultimately increases the disparities you see in the state," he said.

Noonan said that increasing wage and employment equality involves advocating to state legislators, closing tax loopholes for special interests, and reforming property taxes so that cities "become dense urban cores of innovation."

The report shows that gender gaps are mostly smaller than racial gaps. An exception is in labor force participation rate, or the share of the population that is either working or looking for work.

The figure is 71.2 percent for men and 61.3 percent for women. In addition, men saw an increase in median hourly wage from $23.34 to $24.76 between 2015 and 2016, while women saw a decrease from $18.92 to $18.51.

The decrease is around the same decrease black people saw in median hourly wages, which was $13.89 for 2016.

Workers who haven't completed high school saw an increase of wages from $10.44 in 2015 to $12.03 last year. They also experienced an 8.6 percent increase in labor force participation rate, the largest of any education group.

Economist Don Klepper-Smith, former chair of the Governor's Economic Advisory Council, feels that wage growth is a secondary concern to having "an environment in Connecticut that's not conducive to business growth."

The report found that Connecticut would need to increase jobs by 7 percent to replace jobs lost in the Great Recession and keep up with population growth, while Massachusetts and New York have closed the gap, and the figure is 0.4 percent for Rhode Island.

Klepper-Smith expects full economic recovery to come in Connecticut in 2019.

"Before we start talking about disparities, we need to talk about why people create or don't create jobs in Connecticut," he said, "and right now, the state is becoming — for all intents and purposes — a less desirable place to do business because of the fiscal uncertainty."

But Klepper-Smith feels more confident about the regional economy in the Norwich-New London area, saying there is considerable upward momentum in the area that wasn't present several years ago.

He cited John Beauregard of the Eastern Connecticut Workforce Investment Board for "doing a tremendous job getting people employed vis-à-vis the STEM skills."


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